Nolan Company deposits all cash receipts on the day when they are received and i

Question

Nolan Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows a $20,917 debit balance. Nolan’s June 30 bank statement shows $21,645 on deposit in the bank.

Outstanding checks as of June 30 total $2,741.

The June 30 bank statement included a $26 debit memorandum for bank services; the company has not yet recorded the cost of these services.

In reviewing the bank statement, a $20 check written by the company was mistakenly recorded in the company’s books at $29.

June 30 cash receipts of $2,026 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.

The bank statement included a $30 credit for interest earned on the cash in the bank.

Prepare a bank reconciliation for Nolan Company using the above information.

NOLAN COMPANY Bank Reconciliation June 30, 2017 Bank statement balance Book balance Add Add Deduct Deduct Adjusted bank balance Adjusted book balance

Explanation / Answer

Bank Reconciliation June 30, 2017 Bank statement balance 21645 Book balance 20917 Add: Add: Deposit of June 30 2026 Error in recording 9 2026 Interest earned 30 39 23671 20956 Deduct: Deduct: Outstanding checks 2741 Bank service charge 26 2741 26 Adjusted bank balance 20930 Adjusted book balance 20930

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